LMAA Small Claims Procedure

The London Maritime Arbitrators Association (LMAA) has developed several frameworks to resolve maritime disputes. Its flagship LMAA Terms provide a comprehensive set of rules for large and technically complex cases. The Intermediate Claims Procedure (ICP) fills the gap for claims up to around USD 400 000, while the Small Claims Procedure (SCP) is designed to handle more modest cases quickly and economically. This article concentrates on the SCP, reviewing when it applies, how arbitrators are appointed, the costs involved, the procedural steps, and its broader advantages and disadvantages.

When the LMAA Small Claims Procedure applies

The simplified process is available only when the contract says so. A generic clause referring to “LMAA arbitration” will automatically lead to the full LMAA Terms unless the parties stipulate that minor disputes will be handled under the Small Claims Procedure. To minimise uncertainty, the Association suggests model wording for charterparties and other contracts.

By adjusting the arbitration clause, the parties can extend the SCP to disputes of any size. If the clause is silent, the procedure is reserved for cases where each side’s demand or cross‑demand falls below about USD 100 000. This ceiling does not include interest or legal costs unless the parties decide otherwise. Should a cross‑claim exceed the ceiling, either party has roughly two weeks to request that the matter proceed under the regular LMAA Terms or the intermediate scheme. In that event, the same arbitrator can continue if all concerned agree.

Unlike institutional arbitration bodies, the LMAA is simply an association of arbitrators. It does not manage cases or monitor compliance. Once an arbitrator is appointed, the parties correspond with him or her directly and shoulder the responsibility for keeping to the timetable.

Appointment of the arbitrator

The regime contemplates a single decision‑maker. There is no roster; the participants are free to nominate anyone they trust, and many choose from the Association’s list of Full Members or Aspiring Members. If one side asks the other to nominate an arbitrator and the parties agree on a name within two weeks, the claimant then has a further fortnight to pay the standard fee. When the parties cannot agree, either may write to the Honorary Secretary of the LMAA asking the President to make the appointment. The request should outline the dispute and the sort of expertise required but should not suggest particular individuals. After selecting a suitable person, the President sends the standard fee to the arbitrator and keeps the Association’s administration charge.

In practice I often see parties opt for well‑known maritime lawyers or retired master mariners as arbitrators. Choosing a decision‑maker with experience in both charterparty law and maritime operations can smooth the process and reduce the likelihood of misunderstandings about industry practice. Because the LMAA does not supervise the process, it is wise to check the candidate’s track record before appointment.

Costs of LMAA Small Claims Arbitration

Fees are pre‑set and reviewed periodically by the Association’s committee. At the time of writing, the standard charge is about £5 000, and if the arbitrator is appointed through the LMAA an additional administration charge of roughly £450 applies. Where a cross‑demand exceeds the original claim and the arbitrator continues under the LMAA Small Claims Procedure, the respondent must pay an extra fixed amount (currently around £3 000).

The standard fee compensates the arbitrator for accepting the case, reviewing correspondence and documents, and, if necessary, attending a short hearing and drafting the decision. It does not cover out‑of‑pocket expenses such as room hire, which the claimant pays upfront. If the tribunal is asked to determine a jurisdictional objection, additional remuneration may be requested. When a case ends early, the arbitrator must refund part of the fee, retaining only an amount proportionate to the work done.
The prevailing party ordinarily recovers the small claims fee and an allowance towards its legal costs, although the assessment of costs is at the arbitrator’s discretion.

Recoverable legal expenses are capped at a figure set by the LMAA committee. As of early 2026, the limit is about £6 000, or £7 000 when a cross‑demand above the claim is pursued. Each side must provide a brief statement of costs within a week of the final submissions, but detailed invoices are not generally required.

Steps in LMAA Small Claims Procedure and time limits

The SCP favours brevity and efficiency. Disputes are resolved on the basis of written materials rather than testimony, and there are word limits and deadlines designed to keep matters on track. After the arbitrator’s appointment is confirmed, the claimant has about two weeks to lodge its opening statement, which should be no longer than roughly two‑and‑a‑half thousand words and must be accompanied by all the documents on which the claimant relies. This document should set out the issues and the claimant’s position clearly, using numbered paragraphs and exhibits.

Once the respondent receives the opening statement, it has four weeks to file its response and to raise any cross‑demand, each document being limited to about the same length. Should the respondent make a cross‑demand unrelated to the claim, it must pay the additional fee referred to above.

The claimant then has a further three‑week window to reply (using up to one thousand words) and, if necessary, to defend itself against the cross‑demand with a document of the same length to the original claim. Finally, the respondent may submit a short rejoinder within a fortnight, but only if the defence to the cross‑demand raises new issues. Any additional documents at this stage require the arbitrator’s permission.

If a party ignores the word limits or fails to support its argument with evidence, the arbitrator can insist on a compliant replacement. The timetable stops until the corrected version is filed. Missing a deadline without obtaining an extension can have serious consequences: the arbitrator may dismiss the claim for non‑service or decide the case on the basis of the material already provided. Costs incurred because a document was excessive or incomplete can be charged against the defaulting party.

Hearings and evidence

This is largely a documents‑only process. The default assumption is that no hearing will take place, and a hearing will be convened only in unusual cases. Even then, the time available is capped at roughly five hours, divided equally between the parties. Independent expert opinions may be submitted, but only if the arbitrator agrees and subject to a strict word limit of two‑and‑a‑half thousand words.

There is also no routine “disclosure” phase. However, if it appears that a party is holding back relevant material, the arbitrator can order its production and may assume the missing material undermines that party’s case if it is not supplied. For these purposes, “relevant documents” means anything bearing on the dispute, whether helpful or unhelpful to the party holding it.

Decision and avenues for challenge

Once submissions have closed (and any oral session has concluded), the arbitrator endeavours to issue the decision within a month. The award is usually reasoned but cannot be appealed on a question of law. Parties may still contest the arbitrator’s jurisdiction or raise complaints about serious procedural irregularity under sections 67 and 68 of the Arbitration Act 1996, but these grounds are narrowly interpreted. The provision in section 68 is intended to correct only fundamental failings; successful challenges to LMAA Small Claims Procedure awards are therefore rare.

Under the Arbitration Act 1996 and the SCP itself, the arbitrator may rectify clerical mistakes in the award or issue a memorandum explaining a particular point at the request of a party. Such applications must be made within four weeks of the award.

Flexibility and moving to other rules

Although the SCP is designed for minor matters, the arbitrator has power to modify the procedure in unusual circumstances. If the dispute proves too complex or weighty for the LMAA Small Claims Procedure, the arbitrator may direct that it continue under the full LMAA Terms or the intermediate scheme. In that case, the same individual remains in charge as sole arbitrator. One important limitation is that the cap on recoverable costs cannot be increased without both parties’ consent.

Observations and practical tips

In practice, arbitrators often interpret the word limits pragmatically. I have observed cases where an arbitrator allowed a party to exceed the limit by a small margin or accepted evidence filed with a reply, citing the overarching duty to deal with the case fairly. That said, parties should not rely on such indulgence. It is wiser to plan submissions carefully and seek the arbitrator’s leave for any deviation.

The LMAA Small Claims Procedure is intended to be a documents‑only procedure. If you believe an oral hearing is necessary — for example, to cross‑examine a witness or test expert evidence — you should raise this with the arbitrator as early as possible. Late requests are likely to be viewed as attempts to delay the reference and may be refused. Under the Second Schedule to the LMAA Terms, procedural applications should be made promptly; this principle applies equally to SCP cases.

Because the LMAA is an association rather than an institution, the quality and style of awards can vary depending on the arbitrator’s background. Many LMAA members are experienced shipping practitioners rather than lawyers. This has advantages: they may understand commercial realities and the practicalities of maritime operations. However, it also means that awards may focus more on the merits than on legal analysis, and errors of law cannot easily be corrected because of the waiver of appeals. Parties should weigh this risk when agreeing to the SCP.

Finally, while the SCP is primarily designed for maritime disputes, there is nothing to prevent parties from using it in other types of cases. The procedure’s speed, fixed costs and simplicity make it an attractive option for any low‑value contractual dispute where the parties are willing to forgo the extensive procedural safeguards of a full arbitration.

Conclusion

The LMAA Small Claims Procedure offers a streamlined and cost‑effective route to resolve disputes where the sums in issue are modest. Its fixed fees, concise submissions and absence of disclosure or hearings drastically reduce the time and expense involved compared with ordinary arbitration or litigation. For claims up to USD 100 000 it is arguably one of the most efficient mechanisms available in London.

The flip side is that the scope for appeal is limited, and parties must accept that an error of law may go uncorrected. Those contemplating the SCP should therefore consider the trade‑off between speed and finality and ensure that the arbitration clause clearly sets out the desired procedure. As ever, careful drafting and timely procedural planning can make the difference between a swift, economical resolution and a drawn‑out dispute.

If you require legal assistance or representation in an arbitration conducted under the LMAA Rules, please contact me by email, Telegram or WhatsApp.